‘I’ve taken blunt questions – and given honest answers’

The winter crisis of 2010/11 has forced Northern Ireland Water to change the way that it operates. In an exclusive interview, chief executive Trevor Haslett gives WWT editor Natasha Wiseman the inside story

Northern Ireland Water’s chief executive, Trevor Haslett, landed the top job at the public utility during the potable water shortage of winter 2010/11. Although he had worked his way up over a career of some 37 years, mostly spent in the service, it was the resignation of former chief executive Laurence MacKenzie that opened the door to him.

As the company’s director of engineering at the start of the crisis, the images of tens of thousands of people queuing for water across the province are something that Trevor Haslett might like wiped from his memory. It was a humiliating time for the board, and the subsequent investigations were no less flattering, revealing poor management at the highest levels.

Staff morale and customer confidence could not have been lower, but Haslett is keen to stress that the company has “moved on” since then. The three priorities were: to restore the brand name with customers “because it had taken quite a dent”, improve staff morale, and embed the lessons learnt.

A plethora of reports was issued by the Government, the regulator and as a result of the company’s own internal investigations. The NI Utility Regulator made some 53 recommendations, 39 of which have been met, just one short of the 40 targeted for execution by March 2012. Capital investment is required for the remainder, which will take longer.

One of the heaviest criticisms of NIW’s handling of the crisis was its customer call handling and a new instant voice recognition system has now been installed.

“We were heavily criticised for missing calls,” Haslett explains. “Over the three days about 750,000 calls came in to the call centre. It was a limited number of people, we think about 14,000 people, but they put their phones on repeat call.”

Now, he promises the company can tell where a customer is calling from, can issue a message to say it is aware of an issue and issue regular updates.

The number of lines has been increased and an even better high call volume handling system will be in place by December. Haslett says that the company website has also been significantly improved, admitting that previously it was too corporate and not customer focused.

“It was too small a site,” he explained, “once it got a certain amount of hits, it collapsed.”

Facebook, YouTube, Twitter and texting have all been employed in a proactive way to keep customers informed. The impact of improved customer services is filtering through.

“This month we’ve been reporting on volumes of calls, and our calls have at least reduced by about 20%, generally,” Haslett announces.

The seriousness of the problem that NIW had with staff morale was crystallised for Haslett by one long-standing employee who told him that he no longer wore his NIW jacket going into the supermarket in case somebody recognised the fact and gave him abuse.

“That told me a lot about how I needed to change things,” he said.
Haslett explains that he has spent a lot of time going out on question and answer sessions with staff: “I’ve taken some pretty blunt questions and given some honest answers,” he reveals.

As well as the Q&As, the company’s 1,310 staff now have various routes to communicate difficulties, including a new quarterly magazine called WaterLines, an ‘in-touch’ messaging system and an in-house website. Haslett considers himself to be very accessible, inviting staff to email him directly with their concerns.

Another major deficit that the investigations found was in the company’s Major Incident Plan, which has been transformed with the formal implementation of a Major Emergency Group, headed up by the chief executive himself. Haslett explained that when the 2010/11 emergency occurred, while there was a team for emergency response, it did not even have a name.

The new strategy has been tested through a mock incident called Operation Watermills, which took place in October 2011. The company has also increased its stock of bottled water and has a plan in place to import and for local companies to step up production in an emergency. It has also looked at alternative supplies, increasing the number of tanks and identifying the ideal location, in any area in the province, to have a static tank in the event of an emergency. The number of vulnerable customers on the company register was also increased and now exceeds 2,000, a four-fold increase. And NIW says that it will get bottled water to them within six hours.

Another area that Northern Ireland Water took a hammering in 2010 was its procurement regime, which led to an investigation by NI’s Public Accounts Committee (PAC). Frameworks for PC13 will be announced in June and will be issued under a very different regime from the one in place from 2005-10.
Recalling the governance issues the company had with procurement, that led to the investigation, Haslett said it was the company’s readiness to get things done that was at fault. This generous view was shared, to some extent, by PAC.

The Committee’s report, which was published in March, said that there were indications that “managers at all levels broke the rules, in what they regarded to be the best interests of NI Water, to speed up the process when appropriate authorisation [for contracts] would have caused significant delays.”

However the report also said that failures were also attributable to “a deeply embedded culture that made it acceptable to bypass rules, weak financial controls and wholly deficient management information systems.”
So what has NIW done to correct the legacy? Haslett says that “some pretty strict rules” have been imposed on the utility. “For example,” he says, “if I want to appoint a management consultant, we have to give the business case to the Department for Regional Development (DRD) for the Minister to approve.”

It is different on the capital works side, he said, “as long as we have a set of frameworks in place for appointing contractors and consultants, we don’t need ministerial approval.” He explains that this is why the ’40’ target was not hit on the regulator’s recommendations. “DRD didn’t like us giving a direct appointment to WRc, so we had to put the business plan through the hoops and that’s what delayed it,” he explained. “It’s an example of the frustration you have sometimes.”

The company is in the final year of the PC10 investment programme, but work on the two-year PC13 programme, which starts in April next year, is already under way. Two years clearly is not long enough for any substantial plan to be implemented and PC13 is really being seen as a trailer to the main event that will be PC15.

A five-year programme has been announced by the regulator, but this could yet be extended to six years under the Local Government Programme.
Haslett compares the governance model needed for NI with recommendations in the PricewaterhouseCoopers consultation paper for the Republic and is quick to point out that if the Republic does introduce charging in 2014, then NI would possibly be the only place in Europe without a visible charging mechanism.

“So that’s something the NI Assembly need to think about,” he says.
Haslett favours a model based on full charging, despite the political difficulties. He says that conceivably there would be a line on the rates bill that said ‘for the provision of water and waste services’.
“It would be an amount that’s ring-fenced so it’s not competing with health or education,” he said.

Haslett says that the introduction of bills at £160-165 would be significant because water services receive a 74% government subsidy “and even access to that ring-fenced amount would reduce us to below the 50% subsidy. We could no longer be classified as a non-departmental public body, which means we would have access to perhaps raising capital ourselves, subject to the Comprehensive Spending Review.”

He said that Northern Ireland was anomalous in the UK utilities for having an annual amount with a “if you don’t spend it you lose it” approach: “You need that little bit of flexibility so that if you underspend or overspend in one year you can pick it up the next.”

Haslett explains how the £145m capital infrastructure for 2011-12 will drop off in April, sitting at just above £100m for 2012-13, before rising again in 2013-14, to £165m.

He says that the “up and down” funding levels cause considerable difficulty for contractors who do not know what levels of work they can expect, so do not know whether to invest in training and staff. He says this impacts on efficiency and costs.

Haslett is keen to position NIW as having a role advising the Republic on its new model for water services. He highlights governance and asset management as being areas of particular importance in setting up a new water company.

“They don’t, as far as I know, have an asset management plan for the whole of the Republic because each one of the 34 council areas would’ve had their own priorities.

“We’d be quite keen to assist the Irish Government if they want to,” he said.

However, he is understandably sceptical about the projected pace of change that is planned for the Republic, forced by the conditions of the International Monetary Fund bailout.

“They’re going for universal metering in the Republic and hoping to get all of that done by 2014, and at one of the conferences I was asked a direct question – did I think it was possible? And I said, ‘I’ll give a direct answer – no’. Because I don’t think you’d even get it procured properly by then.

“They’re talking about €450m [£365m] on a metering contract, which even if you split it up into 10 contracts, is still 10 big contracts. And how do you procure that properly without challenge? I don’t know.” Having had his temporary contract made permanent in January, during some tricky negotiations, Haslett is enjoying his role at NIW.

“It was challenging, yes,” he said, “but I thought if anyone is going to turn the company around it would be best done by someone who knows the business inside out and knows the people. Particularly the people, because they were the ones that were going to do it.

“I think the company has considerably stabilised since last January and is moving forward. The team spirit is much better, so it’s easier to get things done,” he concludes.

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